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The U.S. Treasury Department
reported last Friday
that the federal budget deficit for the just-completed fiscal year had risen by $80 billion over fiscal 2016 to the ominous-sounding $666 billion, a number many people think is an omen
for the coming of the devil or anti-Christ.

In this case they may be right: The spending and taxing policies about to be put in place by the Trump administration and the Republican-controlled Congress will balloon the federal deficit to $1 trillion or more every year going forward.

And unlike the four consecutive $1 trillion deficits recorded during the first years of the Obama administration, these trillion dollar annual deficits will be the result of enacted changes in federal spending and taxing rather than on a temporary economic downturn. Some of these changes will be permanent. Others will need to be reapproved annually but are unlikely to be rejected in the future.

In July, the Congressional Budget Office
projected (Table 1) that the Trump fiscal 2018 budget will result in an average annual deficit of about $677 billion between 2018 and 2022. But that took the Trump budget proposals at face value and assumed Congress would agree to all the spending cuts proposed by the White House, something that the House and Senate have already shown no interest in doing. That makes the average annual baseline deficit over the next five years closer to $750 billion.

While the White House and its congressional supporters insist the tax cut the House and Senate will consider in the next month or so will eventually pay for itself with much higher economic growth rates, the congressional budget resolution passed by the Senate late last Thursday (and highly likely to be accepted by the House) assumes that the deficit will increase by about $150 billion a year over the next 10 years. Nonpartisan analyses show that the deficit will increase by an average of between
$220 billion
and $240 billion between 2018 and 2027 and even more thereafter. An average of the three estimates results in about a $200 billion increase in the budget deficit for each of the next five years.